Megafon halts trans-Arctic cable project Arctic Connect

“We have decided to reconsider the structure and economy of project Arctic Connect,” the company said.

The Russian telecommunications company Megafon says it will review plans to lay a 10,000-kilometer-long fiber-optic cable from Kirkenes, Norway, to Japan.

The trans-Arctic cable project that has been under planning for several years by Megafon and its Finnish partner Cinia might be put on hold.

In summer 2020, a Russian survey ship spent three months in remote Arctic waters to map possible underwater routes for the cable. Survey operations were to continue in 2021, and by 2023 the cable connection might be up and running, CEO of MegaFon Gevork Vermishyam said in summer 2020. In the course of 2021, a tender on construction works was to be announced.

That will not happen.

The company now says it will revise the project.

“We have decided to reconsider the structure and economy of project Arctic Connect and we need time for such a reorganization,” sources in Megafon told Interfax.

“Since 2019, we have undertaken huge works, both at sea and on land, and all studies will be applied in the future if we decide to continue,” the company informs.

The Russian telecom company will now inform partners and providers about its decision.

Reportedly, the project halt is connected with troublesome negotiations with Japanese partner Sojitz Corporation. According to newspaper Vedomosti, the Japanese trading company has failed to provide co-financing as outlined in a cooperation agreement signed in 2020.

The Arctic Connect is projected to cost up to €1.2 billion. That sum will not be a problem, Gevork Vermishyam argued in 2020 and underlined that investors from Norway, Germany and Japan are ready to contribute.

“The main thing now is get convinced about the possibility to lay the cable in the complicated Arctic conditions, something that has never before been done,” he underlined.

The Arctic Connect has long been lobbied by Finnish authorities and was highlighted in a government report authored by former Prime Minister Paavo Lipponen in 2016.

A telecommunications cable between Europe and Asia via an Arctic route would be politically and technologically feasible, the report reads.

The 200 Tb/s transmission capacity cable connection between the Norwegian town of Kirkenes on the Barents Sea coast and Asian countries was to link northern Europe with Russia, Japan, China and North America, and also meet growing needs in the Arctic region itself, project developers argued.

In Kirkenes, locals saw the cable as a possibility to turn the depressed former mining town into a high-tech hub.

The halt of the Arctic Connect comes at the same time as another trans-Arctic cable project makes rapid progress. The Polar Express will connect Teriberka, the village north of Murmansk, and Vladivostok on Russia’s Pacific coast.

The cable is to cross the Barents Sea to the former military airbase of Amderma in the Nenets Autonomous Okrug where a coastal station will be built. Next stage will be to Dikson, Russia’s northernmost mainland town on the coast of the Kara Sea.

Further connection will be to the port of Tiksi in Yakutia, then to Pevek and Anadyr on the Chukotka Peninsula, into the Pacific with a land station at Petropavlovsk-Kamchatsky and further south to Yuzhno-Sakhalinsk, Nakhodka, before ending in Vladivostok.

The Polar Express is supported by Russian federal authorities.

“The deep-sea cable-laying starts in late May, early June this year,” Deputy Minister of Transport, Aleksandr Poshivay said in early 2021.